Why You Should Know How Much Money Your Friends Make

Margo Thierry |
August 17, 2018

Do you talk about money with your friends? Debt? Salaries? You should.

When I was growing up, my parents took great pains to hide their incomes from me. Whenever I had to fill out a form, like for college financial aid, they’d make me leave the income section blank and they’d fill it out once I left the room. Then they’d seal it in an envelope and mail it off, crossing their fingers.

At the time, I didn’t understand what the big deal was. I had a sense of our financial picture: It wasn’t perfect, but we weren’t starving. In retrospect, I understand that my parents’ secrecy was well intentioned. They wanted to hide the details of our situation so that I wouldn’t worry about it — but it didn’t exactly work. I worried more than I needed to. Maybe some information would have been empowering.

I emulated my parents’ secrecy through much of my life, declining to discuss financial issues whenever they came up. And I wasn’t alone. Nobody in my social circle discussed money, ever. While we were wildly open about other private matters — sex, medical issues, family drama — we acted as if money just didn’t exist when we were together. Sharing financial information with a partner was easy for me (and seems to be for most people), but talking money was completely out of the question for my friends and me.

I didn’t realize what holes this financial secrecy created in my communication with the people I was closest to. I wondered why Erika seemed so uncomfortable whenever we went to dinner. I noticed that Michael seemed stressed all the time, and I couldn’t figure out why. I resented that Alexis invited me to concerts that I couldn’t afford, leaving me to invent excuses for not joining.

That all changed when my friend Brian got a new job and came to me for advice on negotiating his starting salary. We debated whether he should ask for 20 percent more of X, or whether increasing to Y would bump him into a higher tax bracket. Without concrete numbers we were just dancing around Xs and Ys, and I couldn’t really help.

Finally, Brian took a deep breath and named the number.

We began having an actual conversation. And seemingly all at once, the trust and intimacy of our relationship magnified. The conversation branched into other parts of our lives — our budgets, our savings plans, our debt and our values around money.

We were shocked to learn how much of our lives were foreign to each other, despite our closeness (he asks me to vet all his potential boyfriends, and I talk to his mom regularly, for example). We realized that shutting our closest friends out of our financial situations meant shutting them out of a huge part of our lives, since money touches everything.

I decided to follow Brian’s example and start talking openly about money with my friends. I would simply say, “What if we talked about concrete numbers?” when we started tiptoeing around the topic of money. Sometimes the conversation started around the idea of student debt, or rent or travel plans. I was completely shocked by the lack of pushback — it was as if my friends had just been waiting to be asked. Maybe it’s because these friendships are built on a foundation of honesty, but we managed to jump right over any awkwardness. I realize this type of conversation might not be so simple for everyone, but it’s worth at least trying. Once one of us took the plunge, it was completely freeing to be out in the open.

These days, talking about money and salaries with my friends is standard, but it goes far beyond just salary negotiations. Erika and I cook at home now because I understand that meals out aren’t a part of her budget. Michael is less tightly wound because he’s open about the things that stress him out financially and knows he can lean on friends for emotional support. I stopped resenting Alexis after I told her that I just didn’t share her entertainment budget. Now we have dance parties in my living room or movie nights.

I helped most of my friends check their credit scores and showed them how they could improve. We even set up a weekly budget check-in to help all of us stay on track.

But being open about our financial situations goes even deeper: Now we better understand each other’s values and the lives we want for ourselves. I feel like they actually know me. This is true intimacy — to be seen and understood wholly, beyond the public-facing version of myself.